Question: I have performed an appraisal on a renovated like
new home, my comps are all renovated, in the same subdivision, within
the last six months, and vary from 100 sq ft to 125 sq ft larger than
the subject. The reviewer says I should have used a comp with square
footage that is less than the subject even though it needs some TLC
according to FMLS. I did not use this sale because it requires a
highly subjective condition adjustment. Is bracketing by square
footage an absolute rule?
Answer: FHA requires that you bracket by size and sales price or explain why you didn’t. (Appendix D,
page 6). Since FNMA does not mention bracketing, the FHA rule is a
good one to follow.
If you have explained why you didn’t bracket by GLA, the underwriter
should be satisfied. I wouldn’t make a big stink out of this,
however. If the underwriter insists, use the inferior house as a
fourth comparable sale and explain that you included it at the request
of the lender and didn’t consider it in your final opinion of value.
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